Bill allowing higher sales at craft breweries advances

By BRUCE SCHREINERFebruary 27, 2018

FILE - This Dec. 14, 2011, file photo shows vintage Falls City Beer cases, left, and a six-pack of the new brew at the Falls City taproom in Louisville, Ky. A bill allowing Kentucky's craft brewers to sell more of their beer at their establishments is close to clearing the legislature. The measure was advanced without any changes by a Senate committee Tuesday, Feb. 27, 2018. (John Rott/Courier Journal via AP, File)

FRANKFORT, Ky. (AP) — Kentucky’s craft brewers are taking a glass-is-half-full attitude toward a bill allowing them to sell more of their beer at their own establishments. They like the proposed higher sales limits, but don’t like that it still imposes a cap on per-customer purchases.

A Senate leader wanted to give microbrewers the full glass, but backed off his proposal.

The measure was advanced by a Senate committee on Tuesday without changes, leaving it one step away from final passage. The bill has already passed the House, and if it clears the Senate without any amendments, it will go to Republican Gov. Matt Bevin.

The bill looks to boost craft beer makers in a state famous for its bourbons. Kentucky microbrewers have invested nearly $80 million in recent years and employ more than 600 people, said craft brewer Adam Watson, president of the Kentucky Guild of Brewers. Now they’re looking for the right to sell more to beer lovers who show up at their establishments.

The measure would allow daily, on-premise sales of up to the equivalent of two kegs to each customer. The current limit equals a case of 12-ounce beers (2.25 gallons or 8.5 liters).

The bill was scaled back while in the House to reflect compromises after the original legislation drew resistance from wholesale and retail interests.

Senate Majority Floor Leader Damon Thayer spoke in favor of restoring the original bill, which would have allowed unlimited, on-premise sales per customer at microbreweries. But he didn’t ask for a vote on his substitute version that would have removed the sales cap.

Thayer, R-Georgetown, denounced the cap as an artificial barrier to free enterprise. And he castigated the bill’s foes, saying distributors and retailers decided to “gang up” on craft brewers.

“For some reason, some in the industry decided to be paternalistic, to show that they could keep the craft brew guys ‘under their thumb,’” Thayer said during a hearing of the Senate Licensing, Occupations and Administrative Regulations Committee. “This is despicable.”

In a warning shot, Thayer suggested that lawmakers should review state laws that he said give disproportionate power to alcohol distributors.

John Harris, president of the Kentucky Beer Wholesalers’ Association, said after the committee hearing that he was “disheartened” by Thayer’s criticisms.

Harris said his group supported maintaining a sales limit, and that it “ended up where it needed to be.” Lifting the cap, he said, could hurt retail sales of Kentucky’s craft beers.

“We didn’t want something to dampen that enthusiasm,” he said.

Watson said the bill would boost craft brewing but doesn’t remove the “arbitrary and unnecessary barrier holding us back from our potential.”

But the higher sales limit would allow microbrewers to better meet customer demands.

“We’re missing opportunities to make sales,” said Watson, co-owner of Against the Grain, a Louisville-based craft brewery.

Watson said his own taproom is a way to show off his craft brews, but said his business relies on the retail sector for its success.

“The volume of our product is always going to be what goes on trucks and what heads out to retailers,” he said.

Thayer, who voted to advance the bill, acknowledged his substitute might have jeopardized the bill’s chances once it returned to the House. Republican Rep. Adam Koenig, the bill’s lead sponsor, said he appreciated Thayer’s decision to not push for a vote on the substitute.

“We’re ready to get this passed and take a step in the right direction,” Koenig said.